ATLANTA - The city of Baldwin in Habersham County will not have to pay more than $200,000 in fees to an engineering firm for work it did on a proposal for the city's wastewater treatment plant.
The Supreme Court of Georgia Monday morning reversed a Georgia Court of Appeals decision that would have awarded Woodard & Curran $203,807, saying that the firm never had a valid contract for a large portion of the work it performed.
The case dates back to 2008 when federal stimulus funds became available for construction projects through the Georgia Environmental Financing Authority (GEFA). The city of Baldwin approached Woodard & Curran to help the city apply for funds with the goal of making improvements to Baldwin's wastewater treatment plant.
According to a statement from the Supreme Court of Georgia, in May 2009, the city and firm entered into a contract stating that for $5,000, Woodard and Curran would provide supporting engineering documents for the city's funding application for the stimulus funds. The city council approved the contract, as required by the city charter, and following completion of the application, the city paid Woodard & Curran $5,000.
The next month, the the firm submitted a second document labeled "Proposal for Professional Engineering Design Services," which contained a schedule of the work and a scope of services for a total fee not to exceed $210,000. That proposal listed the services the firm would provide to continue the plant project, which would include hiring surveyors, hiring geo-technical core drillers, getting bids for the work and completing the design plans.
In August, then-Mayor Michael Kelley signed the June proposal under Authorization to Proceed, although he did not date the document. He later testified that he had not dated it because he could not himself obligate the city, and he had explained to the firm's project manager that the June proposal would not be authorized until the city council approved it.
After the mayor signed the proposal, however, Woodard & Curran began to work on the tasks described in the proposal. Meanwhile, the stimulus funds dried up before the city received any money, so the project did not go forward.
The city council never approved the June proposal.
When the engineering firm later submitted an invoice to the city for $203,870.44 for the work outlined in the June proposal, the city denied payment, claiming the June proposal was unauthorized and therefore not binding.
Woodard & Curran then sued the city in Habersham County Superior Court, seeking $203,870.44 for breach of contract. The jury returned a verdict in favor of Woodard & Curran for $203,000, and the Court of Appeals upheld the verdict. The city then took the case to the state Supreme Court.
In the unanimous SCOGA opinion, Justice David Nahmias wrote that while Woodard & Curran did perform the work as outlined in the June proposal, that work was not authorized in the May proposal, which had been authorized by Baldwin City Council. The June proposal, while signed by the Mayor, was not a valid contract, since the city council had not approved the expenditure.